Moncton Votes To Charge 3.5 Per Cent Tax On Tourism Accommodations
MONCTON – The City Council passed the first reading of a by-law to allow for a 3.5 per cent levy to be added on the purchase price of tourism accommodations in the city Monday.
The second and third reading is expected to happen in July, with the by-law set to take effect on August 1.
The move came after the provincial government in March introduced legislation that gives municipalities the authority to set up a tourism accommodation levy to support tourism promotion and development and stimulate growth in the sector. Moncton has been advocating for that change to the Local Governance Act alongside the tourism industry and other municipalities in the province.
“Moncton’s been pushing for it as a city and as an entity and it’s great to see it finally materializing,” says Councillor Greg Turner. “This is going to allow our team to really do an excellent job of promoting all the natural assets that we have in the Greater Moncton Area and Southeast New Brunswick. And of course, the other area that we’re really excited about is the events. We keep talking about Avenir Centre. We’ve already hosted over 270,000 people through the doors in a year already….that’s an opportunity.”
Turner says the levy puts Moncton at a level playing field with other municipalities across Canada and North America. PEI, Nova Scotia, Maine and Quebec all have a similar destination marketing fund program.
The tax will be imposed on lodging of no more than 31 days in hotels, motels, inns, bed and breakfasts, resorts, hostels, buildings owned or operated by a post-secondary institution, or other facilities that consists of six or more rooms or rental units offered as lodgings. It remains unclear how Airbnb lodgings will be regulated under this by-law.
Exemptions apply to students who are staying at the dorm of their university or college, people who are staying in a room for more than 31 consecutive days, hotel or motel rooms provided by the city, province of agents for emergency shelter purposes, and tent or trailer sites supplied by a campground, tourist camp or trailer park.
To manage the collection of the levy and to lead renewed tourism marketing efforts, a private sector, industry-led, destination marketing organization will be put in place in early 2020. It will be headed by a board of directors made up of key industry stakeholders. The city has been in talks with theĀ Greater Moncton Hotel Association and other stakeholders throughout the process of creating the levy.
The tourism sector in the Moncton Census Metropolitan Area generates $470 million in visitor expenditures annually and the city hopes to grow that by investing more in marketing and promotion of the sector. The establishment of such a source of funding for was also a key recommendation of the Visitor Economy Master Plan adopted by the city council in February.
“It’s an extremely competitive market. There are a lot of regions and lots of areas that are competing for these tourist dollars. Jurisdictions are extremely savvy in looking at new funding streams in order to be competitive and have that edge,” said Jillian Somers, Moncton’s director of tourism and events, who presented to the council.
Catherine Dallaire, the city’s general manager for recreation, culture and events, said funds from the levy “will not necessarily see the municipality eliminate its current funding for promotion and tourism.” But it may help the city fund events and pay bid fees, she added.
“Those details we really have to work out with the stakeholders because it does need a proper governance system, but in the meantime what we’d like to be able to see is if approved the funds would be maintained in a reserve until such time as there was a governance structure, a body named and those types of guidelines and service level agreements put in place.”